A discount bank loan has a quoted annual rate of 6%. a. What is the effective rate

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A discount bank loan has a quoted annual rate of 6%.
a. What is the effective rate of interest if the loan is for 1 year and is paid off in 1 payment at the end of the year?
b. What is the effective rate of interest if the loan is for 1 month?

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Fundamentals of Corporate Finance

ISBN: 978-1259024962

6th Canadian edition

Authors: Richard Brealey, Stewart Myers, Alan Marcus, Devashis Mitra, Elizabeth Maynes, William Lim

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Question Posted: Nov 14, 2017 02:32 AM

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A discount bank loan has a quoted annual rate of 6%. a. What is the effective rate

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a The discount loan is for one year and interest is only paid once at the end of year annual The loa...View the full answer

Fundamentals of Corporate Finance

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